What Trump’s stark budget says about his priorities

MARCH 16, 2017WASHINGTON—The “skinny budget” is out, and the numbers are stark.

In his debut budget blueprint, President Trump proposes a sharp increase in spending on defense, domestic security, veterans, and school choice, and deep cuts in many domestic programs and in foreign aid.

Specifically, Mr. Trump would slash funding for environmental programs, the State Department, housing, agriculture, the arts, and programs for the poor, among others. One would pay for the other – $54 billion in cuts to nonmilitary spending to cover a $54 billion increase in defense spending. (See below for details.)

At the heart of the plan for fiscal year 2018, which begins Oct. 1, lie two core Trump goals: a reduced role for government in American life, and an emphasis on “hard power” over “soft power” in the global arena. These reflect Trump’s faith in the private sector, disregard for government bureaucracies, desire to place more responsibility in the states, and belief that America’s strength can be best projected through military means.

To the millions of people who rely on the government services that are now on the chopping block, particularly low-income Americans, the proposals may be shocking. But they shouldn’t come as a big surprise; this is Trump fulfilling his campaign promises, says his budget director, Mick Mulvaney.

“You had an America First candidate, you have an America First budget,” Mr. Mulvaney said in a briefing for reporters.

Reductions in many agencies will be achieved by going after waste, inefficiencies, and “duplicative programs,” he says. Not only will national defense get a big infusion of cash for modernization and added personnel, but so too will strengthening of homeland security – including money for Trump’s proposed wall on the Mexican border.

But in fulfilling his campaign promises, he may also hurt many of those who voted him into office.

Trump’s vision, priorities for America

It’s dubbed the “skinny budget,” because it’s just an outline and doesn’t include economic or revenue projections, which is typical for a new president’s first budget. But Trump’s outline is skinnier than most.

It covers only discretionary spending, or one-third of the budget. The remaining two-thirds – dominated by the so-called entitlement programs, Social Security, Medicare, and Medicaid – aren’t addressed. A more comprehensive budget is scheduled for release in May.

“We know that he’s interested in a smaller bureaucracy and really examining the role of government, and taking a look at some of these programs we’ve been financing for years and years, decades,” says Justin Bogie, a fiscal analyst at the conservative Heritage Foundation.

“This is an opportunity to ask, is this something that the federal government should be doing, or should we start passing some of these responsibilities back to the states or back to the private sector?”

The portion of the budget released Thursday has put a bull’s eye on the federal workforce, which could see its biggest contraction since the post-World War II era.

That’s by design. Senior Trump adviser Stephen Bannon speaks of the “deconstruction of the administrative state,” a philosophy that infuses Thursday’s budget document, called “America First: A Blueprint Budget to Make America Great Again.”

Following Reagan’s example

Trump is also channeling the last president to come to Washington with big plans to remake national priorities, Ronald Reagan, analysts say. In his first budget, President Reagan eliminated 18 domestic programs while boosting defense spending.

“The idea is to follow the Reagan model,” says Robert Bixby, executive director of the Concord Coalition, a fiscal watchdog group.

Like Reagan, Trump also plans to remake the tax code, with cuts to both corporate and individual rates. Tax reform isn’t part of Thursday’s budget, and could come later this year.

It all seems like a classic Republican approach, with a big exception: Trump has not made balancing the budget a priority. Not included in Thursday’s budget is a plan for major investment in infrastructure, which Mulvaney says will come later.

And unlike House Speaker Paul Ryan, Trump does not propose reforms to Social Security and Medicare, two massive programs for senior citizens that will only grow in scope as Baby Boomers retire.

During the campaign, Trump promised not to cut entitlements. But in the House GOP plan to repeal and replace the Affordable Care Act, which Trump supports, there’s a major reform of Medicaid, the federal-state insurance program for low-income Americans. The proposed change in the way federal funds are allocated would mean it is no longer an open-ended entitlement, saving the federal government money.

Advocates for the poor argue that Trump’s emerging fiscal policy would harm the very people who he said during the campaign would be a priority for him and his administration – namely, low and middle-income families that have struggled with stagnant or declining incomes.

“Those people would be harmed, even as other parts of the fiscal policy agenda conferred very large new tax cuts on people at the top of the income scale,” says Robert Greenstein, founder of the Center on Budget and Policy Priorities.

“Indeed,” he adds, “the indications are mounting that when we get the full Trump budget, it may well represent the most aggressive, Robin-Hood-in-reverse budget proposal by any president in modern US history.”

Pushback from Congress

But before the new fiscal year even begins, the government will run out of money – on April 28. There is likely to be a big clash in Congress as that deadline approaches.

And as always, members of Congress – including Republicans – have declared the Trump budget “dead on arrival” (DOA). Indeed, every line item of federal spending has its champions, whether it be the National Endowments for the Arts and Humanities or aid to women, infants, and children.

“I don’t think the House and Senate will go along with a deep, deep budget cut,” says Paul Light, a professor of public service at New York University. “There’s just too much self-interest in the committees to approve of that.”

Others suggest “DOA” doesn’t quite capture the state of play on Trump’s first budget.

“Since he’s got a Congress that’s controlled by Republicans, and because this is his first budget, they’ll want to be accommodating,” says Mr. Bixby. “So I wouldn’t declare it DOA, but there will be a lot of changes.”

The exercise of going through the federal budget, line by line, and rethinking priorities is always part of the game, especially when there’s a change of party control in the White House. It’s an opportunity to clean house and look at the effectiveness of programs. Earlier this week, Trump signed an executive order aimed at reorganizing government functions and eliminating “unnecessary agencies.”

Trump’s partial budget outline advances that exercise.

Mulvaney says the budget cuts detailed in the “skinny budget” don’t tell the whole story. Department and agency heads will have a lot of leeway to restructure programs as they see fit, and so functions that appear to be eliminated may be restored in other ways.

Highlights of Trump’s proposed budget

Budget increases:

Defense: 9 percent funding increase. Uses include boosting the size of the Army and Marines, more Navy ships, increased readiness of Air Force combat planes.

Health and Human Services: 18 percent cut, including cuts to the National Institutes of Health.

Commerce: 16 percent cut, including cuts to climate-change research.

Education: 14 percent cut, including cuts to teacher training and after-school programs. The department would add $1.4 billion to promote school choice, including charter schools and vouchers for private school.

Housing and Urban Development:13 percent cut, including community development block grants, a $3 billion program.

Transportation: 13 percent cut, including privatization of air traffic control.

Cultural agencies: National Endowments for the Arts and Humanities and the Corporation for Public Broadcasting, which helps fund PBS and NPR, are all targeted for elimination.